Starting a new business can be daunting. Breaking it down into smaller steps can make the process feel more manageable and help you build momentum until your first sale. If you have a great idea, but you’re not sure where how to get it off the ground, start with this checklist.
1. Perform market research
Whether you have an idea already, or you’re ready to build something from scratch, the first step is to do some research. Investigate how much demand there is for your product or service, as well as the existing competition. The information you learn can help you narrow down your business concept.
Market research encompasses both primary and secondary sources. In practice, it entails conducting focus groups, surveys, and interviews with potential customers (primary research) and reading government statistics and market reports (secondary research).
2. Test your concept
Before you dive in, test your business idea to make sure it’s based on a valid market need. Perform a competitive analysis to make sure your product or service doesn’t already exist. You may want to create a prototype or conduct beta testing to get user feedback on the product or service you plan to launch.
3. Work on your pricing model
There are a few ways to price your product or service, such as a subscription model, flat-rate pricing, or premium pricing. Your pricing model should help you find the right balance of value and revenue as well as fine-tune your price per item.
4. Build a business plan
A business plan is necessary for when you apply for funding. It also helps guide your operations. The goal of your business plan, according to the U.S. Small Business Administration (SBA), is to:
- Help find financing.
- Show you’ve vetted the market.
- Fully detail your execution strategy.
A business plan generally consists of a combination of market analyses, financial projections, and details about your business operations. This plan should be iterative and revisited as your business grows to reflect your expansion and future goals.
5. Work on your sales pitch
Hone in on what makes your business different from everyone else’s. When you’re just starting out, you must craft an elevator pitch that articulates what sets you apart and why investors and customers should care. A great sales pitch will explain what you do or sell to whom and why in two to three sentences.
6. Find funding
There are many sources of funding for new businesses. Some business financing options include:
Many entrepreneurs also bootstrap their ventures using their personal finances or by asking their friends and family for initial capital. Use your business plan to decide what option is right for you.
7. Decide on a business structure
The way you structure your business entity has tax and liability implications. No matter which business structure you choose — a sole proprietorship, limited liability company, or a nonprofit — if it’s more complicated than a sole proprietorship, you will need a lawyer to help set it up correctly. Consult an expert from the start to avoid any tax complications.
8. Get the right licenses and permits
Some businesses, like restaurants and cafes, need specific licenses to operate. Depending on where you operate and your industry, you may need several permits and licenses. Check this list from the SBA to find out what, if any, you need to procure.
9. Open a business bank account
Even when you start a sole proprietorship, it’s critical to keep your business and personal finances separate. Open a separate bank account for your new entity to keep your cash flow organized and trackable when it comes time to do your taxes.
[Read more: 5 Easy-to-Start Business Ideas]
10. Organize your accounting
Anticipate tax time and set up your accounting system to make April much less stressful. Organize your expenses and income into three categories: business income, inventory costs, and other expenses (like payroll, rent, and other overhead). Find and hire an outside accountant, or buy an accounting tool to help you stay organized as you grow your business.
Advertise your grand opening on your social media channels and in local media outlets, like your town newspaper.
11. Develop your supply chain
Does your business idea revolve around a new product? If so, you’ll need to find a way to get it made that’s scalable. You may be able to make items yourself in the beginning, but as your business grows, that won’t be sustainable.
“Getting referrals from fellow business owners via social media and forums can be a great starting point and a way to get feedback on suppliers you’ve been evaluating,” said Liz Bertorelli, owner of online lifestyle brand Shop Passionfruit, in Martha Stewart.
12. File a copyright or patent
Once you have a solid plan for your product or service, protect your intellectual property with a copyright or trademark. You can file to protect the rights to your company’s name, logo, content, creative ideas, or original creations in addition to a product design or service offering.
13. Decide where to sell
There are many companies that launch online before moving into a physical retail space. Warby Parker, Glossier, Casper, and Everlane are all companies that were founded as online-first retailers. Launching online can be a good way to keep costs down, but there are some serious benefits to having a brick-and-mortar location.
14. Develop a brand
Create a strong brand identity, including a memorable name, logo, and branding materials. Your brand identity communicates to consumers your business’s mission, values, and personality. It helps your company stand out from competitors and attract customers. You may want to work with a designer who can translate your brand identity into visual cues.
15. Design product packaging
Once you have your brand identity, it’s time to create the packaging, shipping materials, and any in-store physical assets that you will need to bring that identity to life. Even service businesses should consider using branded invoices or adding a logo to vehicles to help encourage brand recognition.
16. Negotiate a lease
Should you decide to open a storefront, you will need to find real estate property. That usually means negotiating a business lease. Make sure you know how much space you need, carefully vet the neighborhood, and read the contract thoroughly before signing.
17. Get the right insurance policies
The insurance policies you need will depend on the size of your company (i.e., how many employees you hire) in addition to your assets and liabilities. Here are a few policies you might need:
18. Set up a website
Your website is crucial to help customers learn more about your brand. Build a business website that tells your story to build excitement before your grand opening and help people learn about your product or service. Even entrepreneurs who don’t intend to sell online need a website with their store hours, location, and phone number, at a minimum.
19. Register your business
New businesses may need to register with their state government, the federal government, or they may not need to register at all. Generally speaking, if you want to file for trademark protection, or if you need a federal tax ID, you need to register with the federal government.
20. Get the right tools
When you’re just getting started, you don’t need a lot of fancy technology to start selling. But you do need some basics, like a point-of-sale system, wireless internet, and telephone service. You may also need office equipment, like desks and chairs, or software to enable remote work.
21. Prepare for order fulfillment
Retailers and some restaurants need to consider how they will get the product to the customer. If you offer online ordering, what logistics partner will you work with to ensure the item is delivered? Do you offer curbside pickup? For retailers, this means determining what shipping partner has the best rates and reliability — such as DHL, UPS, Fedex, or USPS. For restaurants, this could mean working with a third party like Uber Eats or Caviar.
22. Set up your social media channels
Social media is how many customers discover new brands. Create Facebook, Instagram, and Twitter profiles for your business. These platforms are where you can share news about your upcoming grand opening, launch your products, and generate buzz.
23. Hire an employee
If you have the budget, it’s time to bring an employee on board. Find someone you can trust to delegate part of the day-to-day operations so you can continue to focus on the big picture. This might be a manager, a partner, or your first hourly worker who can oversee the store.
24. Advertise your grand opening
Ready to meet your first customers? Make sure they know you’re about to open for business. Advertise your grand opening on your social media channels and in local media outlets, like your town newspaper. You might run an opening day discount or promotion to improve foot traffic or work with an influencer who can quickly spread the word about your brand.
25. Open your doors for business
Congratulations, you’re ready to go. Good luck selling!
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